Correlation Between Ford and Dataproces Group
Can any of the company-specific risk be diversified away by investing in both Ford and Dataproces Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Dataproces Group AS, you can compare the effects of market volatilities on Ford and Dataproces Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Dataproces Group.
Diversification Opportunities for Ford and Dataproces Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Dataproces is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and Ford is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Ford i.e., Ford and Dataproces Group go up and down completely randomly.
Pair Corralation between Ford and Dataproces Group
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Dataproces Group. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.55 times less risky than Dataproces Group. The stock trades about 0.0 of its potential returns per unit of risk. The Dataproces Group AS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Dataproces Group AS on September 1, 2024 and sell it today you would earn a total of 343.00 from holding Dataproces Group AS or generate 154.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
Ford Motor vs. Dataproces Group AS
Performance |
| Timeline |
| Ford Motor |
| Dataproces Group |
Ford and Dataproces Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Dataproces Group
The main advantage of trading using opposite Ford and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Dataproces Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dataproces Group will offset losses from the drop in Dataproces Group's long position.The idea behind Ford Motor and Dataproces Group AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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